One new service line that I’m seeing more executive teams consider getting into is the supported housing market. The reason for the interest is obvious – national and state policies are focused on moving consumers from institutional settings to home- and community-based service models.

As they consider this service line option, executive teams are asking three fundamental questions:

What is supportive housing?

Why should provider organizations look at supportive housing as part of their continuum and as a new service line?

What are options for a provider organization to develop supportive housing?

To answer the first – supportive housing is a combination of permanent and affordable housing, and supportive services. Characterized by a philosophy of “housing first” before assistance with other life issues, this model is envisioned as a cost-effective way to help people live more stable, productive lives. Populations as diverse as youth aging out of foster care, the elderly, and the homeless mentally ill have benefited from supportive housing.

Why should provider organizations look at supportive housing as part of their continuum and as a new service line? For one, states are moving away from facility-based programs that bundle housing and services, and towards an approach that separates the two. And as states expand their use of managed care and pay-for-performance contracting, providers with proficiency in practices that have potential to generate results and savings will have a competitive edge.

Developing supportive housing presents significant challenges for any organization: First, there is considerable up-front financial investment. Successful supportive housing projects require capital for housing, resources for services and supports, and operational funding for rental payments. Secondly, obtaining the expertise in real estate and affordable housing financing can be difficult for behavioral health and other social service providers.

However, there are some common tools to address these issues. On the financing side, there are standard real estate lenders and firms that specialize in financing for health and human services (see Refinancing Options To Give Your Organization The Cash For Expansion). With regard to development, provider organizations can either bring the required expertise in-house by hiring staff to handle all development-related tasks or hire a development consultant. In the latter situation, the development consultant turns the program over to the provider organization’s management team once it is completed (this is a “turnkey” approach). Provider organization can also create a partnership with a real estate developer in a joint venture, who then handles the majority of the development activities (see CSH Toolkit for Developing and Operating Supportive Housing).

If your organization is looking for a new opportunity, you should consider supportive housing and other housing programs. We’ll continue to keep you posted on the new developments in this space.